The Angry Judge and the Mandate from Tallahassee
We had settled the case, and the judge was furious. She stood up from her seat, looming over us from the bench, and yelled at the at me and the bank’s lawyer. We had dared to agree to postpone the foreclosure sale date so the bank would have time to complete the loan modification that would save my client’s home—and the bulging veins in her forehead told me that the judge was not happy about it.
At one point, she actually threatened to report me and the bank’s lawyer to the Bar. Apparently, she thinks it’s unethical to agree to a settlement if that settlement involves a time delay that doesn’t meet her approval.
What made this judge so angry? She told us her job was to clear cases, and do it quickly. She fumed that the courts were under a “a mandate to get rid of all of our old cases” and that our agreement was somehow interfering with that.
Money or Justice: Pick One
Unfortunately, this problem is all too common throughout the courts the Florida handling foreclosure cases. They put speed over all else: The interest of the parties, the interest of justice, even settlement agreements.
The pressure on the courts, according to some judges, comes from the top: chief judges of the various circuits have said, both on and off the record, that the funding of the judicial branch depends on how fast they “clear out the backlog” of foreclosure cases. And this pressure is having an effect: judges across the state are forcing cases to conclusion, even when the cases and the parties themselves are not ripe for resolution.
What gets left behind, all too often, is the notion that the rule of law applies equally to all. Banks obtain foreclosure judgments even when those victories violate the rules of evidence and the rules of civil procedure that apply to parties in every other type of court case, usually at the expense of the hardest hit and in favor of our wealthiest and least ethical institutions.
Focht v. Wells Fargo: A Question of Great Importance
And this week, the Second District Court of Appeal—until now, one of the most reliable rule-of-law appellate courts—has added its voice to the throng of judges calling for special treatment for banks. In Focht v. Wells Fargo [PDF], a case released this week, the Court reluctantly overturned a foreclosure judgment because the bank failed to follow a centuries-old rule that it had to prove it was the right party to enforce the loan. But at the same time, it asked the Florida Supreme Court to consider bending the rules for the banks, by certifying the following question as one of “great public importance”:
Can a plaintiff in a foreclosure action cure the inability to prove standing at the inception of suit by proof that the plaintiff has since acquired standing?
In other words, if the bank can’t prove that, when they filed suit, they had a right to enforce the loan, can they just pick up that right during the lawsuit and proceed?
Rewarding the Crooked and the Incompetent: An Express Lane for the Banks
Essentially, what the Second District proposes is a special “express lane” for banks that apply to no other litigants. They want to loosen the rules, rather than tighten them, because banks—with all their resources, wealth, and expertise—have been unable to meet the same standards that every other participant in the legal system must adhere to. And why? It’s because the banks’ incompetence has made the courts’ job more difficult:
Appellate courts have seen a recent influx of appeals in which defendants have successfully argued that the trial court erred in entering a foreclosure judgment in favor of the plaintiff because the plaintiff failed to establish standing at the time of filing. In many of these cases, the plaintiff presented unrefuted proof of standing acquired after filing but prior to the final hearing… We note that the supreme court has not applied this standing principle in the exact context presented in this case. And we question whether, in light of the ongoing foreclosure crisis in this State, the supreme court would adhere to this principle in cases in which a plaintiff has acquired standing by the time judgment is entered.
And even the judge whose frustration resulting in the certified question admits the banks are to blame:
Admittedly, in this case and in numerous other cases the financial institutions have brought these problems upon themselves by the complex methods of securitizaton and their own sloppy record-keeping.
And that judge expressly advocates giving special treatment to those incompetent litigants:
But for the precedent, there would appear to be no reason to reverse this case.
Standing: An Important Check on Judicial Power
The Focht court expresses concern about using the standing argument as a way to address these abuses—while proposing no other solution to the problem. Diluting the standing requirement is clearly not the answer, however, as standing is an essential check on the power of the courts to render orders affecting people who aren’t part of the disputes before them. As the U.S. Supreme Court has stated, in Allen v. Wright, 468 U.S. 737 (1984):
The doctrine that requires a litigant to have “standing” to invoke the power of a federal court is perhaps the most important of these doctrines… Standing doctrine embraces several judicially self-imposed limits on the exercise of federal jurisdiction, such as the general prohibition on a litigant’s raising another person’s legal rights, the rule barring adjudication of generalized grievances more appropriately addressed in the representative branches, and the requirement that a plaintiff’s complaint fall within the zone of interests protected by the law invoked.
The Focht court wants to throw these protections overboard because the banks are incompetent and the courts are overburdened. Instead of charging the banks with supplying the resources to address the burden caused by their many flaws, the Second District wants to expand the power of the courts to help those hapless banks, jettisoning the checks and balances of government along the way.
An Important Answer: The Rule of Law Matters
Fortunately for all of us, the State of Florida—all three branches—have already given us the answer to the certified question. Instead of loosening the rules in favor of the incompetent and the crooked, the courts should tighten them.
One circuit judge explained this in an order dismissing a foreclosure case [PDF]:
This is one of the few times in the history of Florida jurisprudence where the Florida Supreme Court has deemed it necessary to subject an entire industry to special rule due to the industry’s documented illegal behavior. The amendment of Fla. R. Civ. P. 1.110 (b) was a direct result of the robosigning scandal. The comments to the rule amendment… indicate the depth of the court’s concern with this industry.
So the Florida Supreme Court expects litigants to tell the truth. In fact, the specific abuse that inspired the rule is the same one in the Focht case—false claims of lost notes.
And more recently, the Florida Legislature enacted sweeping reforms to foreclosure procedures, signed into law by Governor Scott in June of 2013. Among those reforms, the banks filing foreclosure lawsuits have to swear under oath, at the time they file the foreclosure action, that they have the right to enforce the loan—and they have to describe, in detail and under oath, the facts that allow them to proceed. Only a handful of areas of law—name changes, adoption, and the like—require those initial filings to be sworn. And this is the only one that requires the oath due to mass incidence of documented fraud.
So yes, there is a mandate from Tallahassee—tell the truth, from the outset, about who can enforce the loan. And if you’re not that party, you can’t proceed. So the Second District can rest easy. All three branches of the government have spoken, and they say: tighten the rules, do not loosen them.